Purchased for $1,329,000 in March 2008 with $140,800 (11%) down and currently listed as “Active” on the MLS with a list price of $1,385,000, last week the Noe Valley home at 865 Duncan was taken back by the bank with no bidders willing to pay $1,152,387 in cash on the courthouse steps. Someone might want to alert the Realtors.

Two weeks later the listing for 865 Duncan was finally withdrawn from the San Francisco Multiple Listing Service (MLS). And yesterday, the “lovely and large home” at 865 Duncan returned to the MLS as bank-owned and listed for $1,295,000.

Having been reduced to $1,275,000 in January, the sale of 865 Duncan has closed escrow with a reported contract price of $1,280,000. Call it 4 percent under early 2008 on an apples-to-apples basis (and officially “over asking”) for the single-family Noe home.

In fairness, the cashier’s check at trustee auction is only one part of the cost. Uncertainty about the condition of the home, the time and money it takes to remove an occupant, etc..
There is a price for everything….

You also don’t necessarily get a clean title at an auction.
You can even buy a second mortgage at an auction, subject to a first.
Or you can get a first mortgage that foreclosed with defects, clouding the title, and making title insurance impossible to get without clearing the title.
It’s tough to invest the energy into researching all that stuff when someone else could outbid you who doesn’t realize it might be lurking, or the bank could start the price at a high price.

Tipster
Based on your argument, no sane person would ever buy off the steps. I can assure you people have done so successfully in the past. It takes time, resources, effort and liquidity but it can be done, even in SF! The free market may not be truly free but it can be profitable for the right type of investor.

@Bart,
I don’t think Tipster was saying that “no sane person” would ever do it. Just that it is difficult and time consuming – with the implication, in my opinion, that it is to be done by professionals, not just your average Joe looking for a deal.

For $127K, you got a clear title, opportunity to inspect, and opportunity to finance. If the plumbing and kitchen were ripped out, the place was full of termites, or the foreclosure details or chain of title were improperly handled, I could see this costing more than $127K.
Checking all that stuff that can be checked for ten of these, to land one of them, also has a cost.
This isn’t like foreclosures from 1986. 1:The banks are letting people live in them for years. Years of termites and dry rot and water leaks and whetever else can get expensive. Someone not making payments has no incentive to maintain. 2:banks weren’t as careful. Some title companies won’t touch foreclosures of certain banks because they don’t have proper documentation. I’ve seen foreclosures with no NOD recorded. Good luck selling that one!
Is there a price at which the risk is worth it? Sure. Can you pay more than that price and get lucky? Sure. Time and time again. Can you get burned on the first one? Yes.